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Sunday, March 5th, 2006

Introduction:

Even the most optimistic astrologer from a nation which takes almost
every major decision only after consultation with astrologers of whatever
level of credibility, could not predict the incredible changes which have
been taking place in the world's largest democracy and one of its oldest
civilisations. Ms Arundhati Roy, the civil rights activist better known for
her book The God of Small Things for which she won the Booker Prize, wrote a
short while before the remarkable transformation of her country that "India
had lost its innocence." Shemust be experiencing adjustment problems with
the unabashed pro-western [read American] attitude of the new generation of
Indians benefiting from American outsourcing which makes India the country
of choice of international investors and the envy of the rest.

It is a remarkable country in many ways. With a majority Hindu
population, it is constitutionally secular, has a Muslim President, a Sikh
prime minister and a Christian as head of its ruling party. Centuries of war
and invasion did not end with independence on August 15, 1947 but was
accompanied with bloodletting, the partition of the country with the birth
of the Muslim state of Pakistan and the death of one of its greatest
citizens - Mahatma Gandhi, the champion of non-violence killed at the hand
of a Hindu fanatic.

The British Raj and before:

It is also a fascinating country. Colonialism left India with a dislike
for international trade and a distrust for international investors. The
India of the British Raj was conquered not by a political state but its
trading arm, the British East India Company that controlled the large swathe
of a sub-continent with a population of more than twenty times the British
population. Indeed it was not until 1858, more than 250 years after it had
arrived that India (and that would include what is now Pakistan and
Bangladesh), was brought under the full control of the British government
proper.

But even before then, India had been invaded and ruled by Muslim tribes
from Central Asia, whose contributions, including the building of one of the
wonders of the modern world and political and governance systems, are often
overlooked or contrasted with the negative roles which they played,
including at some points the not-too-subtle and forced conversion of Hindus
to 'the faith.'

The record of the British Raj, the term used to describe the period of
British control of the sub-continent, wreaked disaster on the culture,
livelihoods and development of the people and by the ruthless pursuit of
power and riches, scarred a people almost for life. According to Jeffrey
Sachs's book, The End of Poverty, India had no per capita growth during
close to three hundred years from the year 1600 to 1870, and in the
seventy-five years thereafter to independence saw per capita growth of 0.2
per cent!

Independence and after:

At independence, the country had a literacy rate of less than 20% and
life expectancy of just over 30 years. Industry was practically non-existent
with the country serving merely as the producer of raw materials for the
British factories. Of a population of hundreds of millions the majority were
mere peasants and house serfs while the country's entire commercial life was
under British control. Post-independence has not been a smooth ride although
significantly there has not been a famine since that time, despite failures
of the monsoon with its mixture of blessings of water for farming, and
floods.

How did such a country develop into one that was described as the star of
the show at the 2005 World Economic Forum in Davos, Switzerland to which it
sent a dream team not of its more recognisable Bollywood faces, but of three
ministers of the central (union) government, three regional chief ministers
and a host of business persons and academics? Indeed, of the 244 scheduled
sessions, twelve featured India and sixty featured Indian speakers. Only
this week, India received the US President for a three-day visit, the high
point of which was the conclusion of a historic agreement that effectively
brings India out from the nuclear cold. That agreement which has to win
approval in the US Congress underlines India's importance as a growing
economic world power although it is certainly helped by India's
geo-political role as seen by the US as a balance to the growing threat of
China in Asia not only as an economic superpower but as a military power as
well.

Lessons:

The story is one that offers many lessons to the rest of the developing
world, where India was for decades a leader, not least because it was led by
such internationally recognised figures as Nehru, Indira Gandhi and members
of her clan. The era of the Non-Aligned Movement in which Guyana was a small
but key player was certainly good for India's international image even as it
pursued an internally-focused path of economic development with a strong
flavour of state participation in industry and commerce. There was a heavily
regulated economy accompanied by a pervasive need for licences for most
imports, exchange controls, and a strong bureaucracy.

The era was also marked by an emphasis on education at all levels, with
universities and institutes of technologies going up around the country.
That emphasis is now allowing India to reap huge benefits even from the
graduates who, unable to find work at home migrated overseas, took up some
of the top positions in prestigious firms, sending back vast sums and
developing linkages with businesses back home. The benefit also comes from
those who stayed home and are the nucleus of the world-class information
technology businesses that are now the face of India.

'Hindu' growth rate:

Education and health were also priorities for the immediate
post-independence governments that had to confront a debilitating caste
system, the legacy of centuries of colonialism and demands for social and
political justice from the majority that were poor, landless and hungry. For
the first two decades of an independent India, the economy grew by about 3.5
per cent, dubbed by critics and pessimists as the 'Hindu' growth rate.

Things started to happen during the later stage of that period with the
successful Green Revolution that resulted in a remarkable increase in
agricultural production, while the rest of the economy showed only modest
improvement. But the world was moving faster than India - steeped in
history, tradition and culture - appeared capable of matching, and the
country soon found itself unable to compete in an increasingly open and
liberalised world economy.

Perhaps it was the time when India indeed needed to lose its innocence,
or more grandly when Nehru's famous words "tryst with destiny" might have
aptly applied. In came current Prime Minister as the Finance Minister in
1994, Dr Manmohan Singh, a British trained development economist who set
about, in the mode of a Desmond Hoyte under Guyana's Economic Recovery
Programme, to dismantle the licensing system and to liberalise the economy.
It would be easy to say the rest is history and leave it at that, but the
story of the rise of the Indian economy and its influence in the world is a
triumph of faith, competence, democracy, an independent and competent
judiciary and how the success of the decade of development has set the stage
for what many are now predicting would be a century of China and India, a
century when Asia will once again become the centre of the world.

The gains of the last decade of the previous century, however, did not
translate equally for all the people, and while poverty which was once the
poster child of India has fallen quite dramatically - it is now below 30%
for the first time in centuries - the more recent growth has been in the
cities, (some of which are so beaming with confidence that they are going
back to their original names), while the rural areas and states have lagged.
The current government is committed to electricity for all, universal access
to health, education and opportunities, that is witnessing the erosion of
the privileges of the upper castes.

The current Finance Minister has redefined another date with destiny,
setting the year 2015 when the targets of the Millennium Development Goals
are to be achieved. Unlike our own government which budgets on the
optimistic, wishful side, the Indian Finance Minister uses in his
projections the lower end of the range of 7% growth in real GDP while hoping
to achieve the higher number of 10 per cent.

Ties that bind:

And to stem the inevitable drift from rural India to the cities, India is
once again embarking on another Green Revolution, but this time more
technology-driven and with projected yields that are comparable to the best
given the circumstances of nature and geography. Such an emphasis is not
without political motives, however, as the previous government which
presided over the decade of development was thrown out of power by the rural
masses, dissatisfied with what they perceived as the disproportionate
attention to the cities with their predominance of services, technology and
manufacturing, and the growing middle class.

It is easy for anyone, and more so someone with historical ties to India,
to become overly positive about that country. The Beatles did and enriched
their own and the music of the anglophone world as a consequence. Bill Gates
did and strengthened his own company. It is a favourite of Bill Clinton and
its succession of often fractious coalitions at the centre competing with
regional governments that range from Communist to everything else is an
exemplar of democracy at work. Sixty years of uninterrupted democratic rule
over a poor country of more than one billion people alone wins it the
admiration of the world.

More to be done:

But there is still so much more that it can exploit that is genuine
Indian. While Indian restaurants can be found in most major cities, its
cuisine still does not appear on the menu of international chains; its
tourism potential is still to be realised; its gift to the world of music
and Yoga has still only been received by select groups even though the
Church in the US is now marketing Christian Yoga; its unique brand of
philosophy, its medical facilities that dollar for dollar can compete with
the best that America can offer, its craft and textile and its furniture and
linen can all be successfully packaged as marketable products
internationally. Where else in the world does a major public infrastructural
work come in under budget and three years ahead of schedule?

The new deal with Bush should be a major fillip to a country which
despite having close to 18% of the world's population has less than one per
cent of its known oil and gas reserves. The manufacturing sector which has
seen a dramatic rise in the production of parts and components for the
world's auto industry, the printing industry and leather goods would benefit
immensely from cheaper and more readily available power.

Problems:

But that does not mean that India does not have major problems. Its
relationship with its two nearest neighbours, China and Pakistan, though not
currently hostile can hardly be considered friendly; Maoists still engage
soldiers in pitched battles and retreat into the hills and forests; Indian
Kashmir with a Muslim majority challenges the twin commitment to autonomy
and defence of border integrity; India still has only a few companies that
can be considered truly global and its dream of a seat on the Security
Council of the United Nations is still to be realised. Will its new wealth
soon lead to the discarding of Indian values and the things that have in
fact made that country great? Just look at some of the trash that passes for
Indian films. Would the increasingly powerful American culture displace the
centuries of tradition which Topol so plaintively yearned for in Fiddler on
the Roof?

Guyana:

Can Guyana for which India clearly has a soft spot benefit from the
lessons and ties to India? The evidence suggests that we underestimate the
potential benefits of any such relationship for why else would we appoint Mr
Ronald Gajraj, a ministerial discard who showed before the Chang Commission
enquiring into his ties to criminal elements that diplomacy is certainly not
one of his strong points. That India would have accredited him is a
disappointment for a country which during the decades after it gained
independence was a leading country when it came to international diplomacy.

Can we not learn from the high quality judiciary, the press and the
manner in which political parties which compete vigorously at the state
level are willing and do work at the centre? India has proved that
competitive politics does not require confrontation, division and perpetual
strife. Can we not learn from its Saint who even before Christ spoke of the
importance of "good rulers who observe ethics, commit no crime and walk the
path of honour and courage"?

Next week we look at the financing of the Berbice Bridge and the improper
scramble to fund it.